Posted by Deepak Gupta
Posted on 12/31/2011 09:19:00 pm
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FOR INFORMATION OF THE MEMBERS

Subject: Extension of last date for complying with the CPE hours requirement for the calendar year 2011 for the members holding COP from 31st December, 2011 to 31st March, 2012

This is for kind information of the members that the Council of the Institute has decided to extend the last date for complying with the CPE hours requirement for the calendar year 2011 for the members holding COP by three months, i.e., upto 31st March, 2012.

Posted by Deepak Gupta
Posted on 12/29/2011 08:10:00 pm
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F. No. 137/99/2011 – Service Tax

Government of India Ministry of Finance Department of RevenueCentral Board of Excise and Customs,

New Delhi, the 29th December 2011

ORDER NO 3 /2011 – Service Tax

In exercise of the powers conferred by Rule 7(4) of the Service Tax Rules 1994 read with notification No. 48/2011-Service Tax dated 19th October 2011, Central Board of Excise and Customs hereby extends the date of submission of half yearly return for the period April 2011 to September 2011, from 26th December 2011 to 6th January 2012.

This is being done in view of the fact that assessees are facing problems inelectronic filing of returns due to various reasons.

This is to bring to the attention of students that the Revised Schedule VI to the Companies Act, 1956 issued by the Ministry of Corporate Affairs on 28th February, 2011 pertaining to the preparation of Balance Sheet and Profit and Loss Account under the Companies Act, 1956 for the financial year commencing on or after 1.4.2011 shall not be applicable for the PCC, IPCC and Final examinations to be held in May 2012.Director,Board of Studies

Posted by Deepak Gupta
Posted on 12/24/2011 09:20:00 pm
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• Effective Date : April 1, 2012• New Direct Tax Code 2011: Major relief for salaried class• The new provisions under the Direct Tax Code are as follows:
• Tax for income between Rs. 2 lakh – Rs. 5 lakh: 10%
• Tax for income between Rs. 5 lakh – Rs. 10 lakh: 20%
• Tax for income over Rs. 10 lakh: 30%
• Corporate tax has been kept at 30%.
• The limit for exemptions for salaried people is Rs. 2 lakh including resident women, while that for senior citizens is Rs. 2.5 lakh.
• Under the DTC Bill, the annual deduction has been raised to Rs. 1.5 lakh.
• The Government has also proposed to restore back the taxation of retirement savings, in the nature of provident fund contributions and pure life insurance and annuity products, to the Exempt-Exempt-Exempt scheme from the earlier proposition of Exempt-Exempt-Tax scheme
• Wealth tax under the provisions of initial DTC, was required to be paid only on wealth in excess of Rs. 50 crores at a tax rate of 0.25% but on all assets including financial assets i.e. investments in shares. Under the current tax regime, wealth tax is required to be paid @ 1% on wealth in excess of Rs.30 lakhs.
• Currently under the Act, no tax is required to be paid on securities held for more than a year from the date of acquisition and sold on the stock exchange on which securities transaction tax is paid. In addition to this, for securities held for less than one year, the tax liability is restricted to 15%. However, under the DTC, there has been some relief granted to the tax payers by providing for a specified percentage deduction from income / indexation benefit depending on the nature of security on assets held for long term. However, in case of short-term assets, there is no relaxation to the taxpayer and tax will be required to paid as in case of any other ordinary income.

Posted by Deepak Gupta
Posted on 12/22/2011 07:24:00 pm
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Two important bills slated for passage this session have been yanked back from Parliament for fresh tweaks, in another embarrassing climbdown by a government attempting to convey an impression of decisiveness after being pilloried for months over paralysis in policymaking. The government withdrew the Companies Bill and Pension Fund Regulatory and Development Authority Bill on Wednesday after the BJP opposed the first and coalition ally Trinamool Congress withdrew its support for the other. The passage of the two bills during the ongoing winter session was key to the government's efforts to show it had finally managed to wrest back the initiative after the failure to push FDI in multi-brand retail earlier this month.

Trinamool leader and West Bengal Chief Minister Mamata Banerjee on Tuesday withdrew her party's backing for the pension bill. In a letter to Finance Minister Pranab Mukherjee, she said her party could not accept the bill in its present form and asked for a fresh review.

The government had already made substantial changes to its original legislation after initially rejecting recommendations on it by a parliamentary panel. At a meeting with senior BJP leaders on Monday, Mukherjee had agreed to accept the recommendations on the legislation made by the parliamentary standing committee on finance. Accordingly, an amended bill was prepared that fixed foreign investment ceiling at 26% and offered assured returns to subscribers.

The government, which had thus secured the backing of the BJP for the bill, could have gone ahead with the legislation, but chose not to do so for fear of antagonising an important ally. Strident opposition from Banerjee was also responsible for scuttling FDI in retail.

While the government had the BJP's support on the pension bill, it did not have as much luck on the Companies Bill as the main Opposition party forced it to send the legislation back to the standing committee on finance headed by senior BJP leader Yashwant Sinha.

At a meeting with the finance minister on Wednesday morning, BJP leaders Sushma Swaraj, Arun Jaitley and Sinha objected to the government's claim that it had in general accepted the recommendations of the standing committee.

The BJP leaders also argued that since the government had consulted other stakeholders after the standing committee gave its report on the Companies Bill in August 2010, it should be sent back to the committee again. Despite the seeming setback, the Companies Bill is unlikely to face major obstacles or delays, with the standing committee likely to take it up on January 6. Officials expect it to be presented in Parliament in the budget session.

Industry was still disappointed. "Industry has waited quite long for this bill. Further delays will create uncertainties especially at the time that national accounts and reports are being finalised," said Rajiv Kumar, director-general of lobby group Ficci.

The developments over the Pension Bill will represent a bigger setback to the government, dashing its hopes to pitch it as one of its showpiece legislation on financial sector reforms in the current session of Parliament.

Posted by Deepak Gupta
Posted on 12/21/2011 06:18:00 pm
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A simple effort has been made to analyze the Companies Bill, 2011 along with brand new provisions as introduced in the Loksabha on 14th December, 2011 with the help of inputs provided by ICSI.

SCHEME OF NEW COMPANIES BILL, 2011

The Bill has 470 clauses and 7 schedules as against 658 Sections and 15 schedules in the existing Companies Act, 1956.

The entire bill has been divided into 29 chapters.

Following chapters have been introduced, viz.

Registered Valuers (ch.17);

Government companies (ch. 23);

Companies to furnish information or statistics (ch. 25);

Nidhis (ch. 26);

National Company Law Tribunal & Appellate Tribunal (ch. 27);

Special Courts (ch. 28)

Just like previous The Bill empowers Central Government to make rules, etc. through delegated legislation after having detailed consultative process (clause 470 and others).

The Bill provides for self-regulatory process and stringent compliance regime.

THE SALIENT FEATURES OF THE BILL:

Concept of One Person Company (OPC limited) introduced by Companies Bill, 2011 through Clause 2(62).

In Clause 2(85) of Companies Bill, 2011, Small companies have been defined by fixing maximum paid-up share capital not exceeding Rs. 50 Lakhs and such companies will be required to follow less stringent regulatory provisions.

In Clause 18 of Companies Bill, 2011, the proper provision for Conversion of Companies already registered has been introduced.

In Clause 7(1)(b) of Companies Bill, 2011, A provision has been made regarding declaration to the effect that all the requirements of the Act in respect of registration and matters precedent or incidental thereto have been complied with. Company Secretaries continue to be recognized for the purpose of giving this declaration.

INTRODUCTION OF E-GOVERNANCE

Another important feature added by Companies Bill, 2011 in corporate practice is formal introduction of much awaited concept of E-Governance.

E-Governance proposed for various company processes like maintenance and inspection of documents in electronic form, option of keeping of books of accounts in electronic form, financial statements to be placed on company’s website, holding of board meetings through video conferencing/other electronic mode; voting through electronic means.

After the introduction of E-Governance companies can maintain its statutory registers in electronic mode and hold its board meetings through video conferencing.

BOARD AND GOVERNANCE

Appointment of Key Managerial Personnel [Clause 203(1)]

As per clause 203 of Companies Bill, 2011 the Company Secretaries are recognized as whole-time key managerial personnel. Also Companies Bill, 2011 has made the appointment of Company Secretary mandatory.

As per clause 203 of Companies Bill, 2011, every company belonging to such class or classes of companies as may be prescribed shall have the following whole-time key managerial personnel,—

Managing director, or Chief Executive Officer or manager and in their absence, a whole-time director; and

Company Secretary.

Unless the articles of a company provide otherwise, an individual shall not be the chairperson of the company as well as the managing director or Chief Executive Officer of the company at the same time [Proviso to Clause 203(1)].

Bill 2011, also provides the definition of Key Managerial Personnel under Clause 2(51) of the Bill, which is as follows:

“Key Managerial Personnel”, in relation to a company, means—

(i) the Chief Executive Officer or the managing director or the manager;

(ii) the Company Secretary;

(iii) the Chief Financial Officer if the Board of Directors appoints him; and

(iv) such other officer as may be prescribed;

Every Company Secretary being a KMP shall be appointed by a resolution of the Board which shall contain the terms and conditions of appointment including the remuneration. If any vacancy in the office of KMP is created, the same shall be filled up by the Board at a meeting of the Board within a period of six months from the date of such vacancy [Clause 203 (2) & (4)]

If a company does not appoint a Company Secretary, the penalty proposed is:

On company – one lakh rupees which may extend to five lakh rupees.

On every director and KMP who is in default – 50,000 rupees and 1,000 rupees per day if contravention continues.

MINIMUM PERIOD PRESCRIBED FOR AT LEAST ONE DIRECTOR ON BOARD TO STAY IN INDIA

This kind of provision also prescribed for the very first time. Every company shall have at least one director who has stayed in India for a total period of not less than 182 days in previous calendar year [Clause 149(2)].

CONCEPT OF INDEPENDENT DIRECTORS

The concept of independent directors has also been touched upon for the very first time under clause 149.

All listed companies are required to appoint independent directors.

Such other public companies as may be prescribed by the Central Government shall also be required to appoint independent directors.

At least one-third of the Board of such companies should comprise independent directors.

Nominee director appointed by any institution, or in pursuance of any agreement, or appointed by any Government to represent its shareholding shall not be deemed to be an independent director.

As per first proviso to Clause 161(2) only an independent director can be appointed as alternate director to an independent director.

The Independent directors shall abide by a code provided in Schedule IV to the Bill.

Independent directors shall hold office up to two consecutive terms. One term is upto five consecutive years.

Eligible for appointment in same company after cooling period of three years.

BOARD MEETINGS THROUGH VIDEO-CONFERENCING ALLOWED NOW

Another master change proposed in Companies Bill, 2011 under clause 173(2) is participation of directors at Board Meetings has been permitted through video-conferencing or other audio visual means, provided such participation is capable of recording and recognizing. Also, the recording and storing of the proceedings of such meetings should be carried out.

Posted by Deepak Gupta
Posted on 12/19/2011 12:33:00 pm
with No comments

The President and members of the Council of the Institute of Cost and WorksAccountants of India express their utmost unhappiness on the passing of the ICWAI.Amendment Bill in the Rajya Sabha on 12th Dec 2011, by which the name was proposed to be changed to the Institute of Cost Accountants of India. Our Institute strongly objects to the move by the sister professional body in interfering the activities of the another professional body to encourage foreign management accounting bodies to establish their presence in India to the detriment of Indian professionals. The Hon’ble Minister in his reply to the debate in Rajya Sabha also questioned “After independence, why a colonial name like Chartered should be there. You know,this is a matter which is left to the Chartered Accountants of India to consider.”

We also demand that in the post independence era let the Government also change the name of the Institute of Chartered Accountants of India into some other name or remove the name “Chartered”. While for this the Government feels that it is the matter which has to be taken up by the Chartered Institute, in our case we find that without our consent our name is proposed to be changed at the behest of The Institute of Chartered Accountants of India. The dominant position enjoyed by the Chartered Accountants aretaken advantage by that Institute in creating block for a sister professional body which is catering to the youth to get a professional accounting qualification while working in whatever employment they are already in, to further their growth prospects.

The Institute of Chartered Accountants of India have been continuously interfering with the name change of our Institute, objecting to the name by which the similar cost accounting bodies across the globe are called. Unfortunately, due to their dominant position which was recognized even in the Report of the Standing Committee of Parliament, our genuine request is not heeded by the Government. In the Rajya Sabha’s debate during the Bill many Hon’ble Members commented that the entry of foreign consulting firms through surrogate Indian audit firms should not be encouraged. They also commented that “That is why it is quite possible that money is illegally taken by some entities to foreign countries with the advice and superb consultancy with the Chartered Accountants ……. That is why along with the quantity of Chartered Accountants ……… the professional ethics in this country, unfortunately, are declining very fast and sometimes feel that it is going to the point beyond no repairs.” In another statement in the same debate Hon’ble members commented “Now in the recent 2G scam, you will be surprised to knowthat in all the cases of all these companies, whatever certificates were given by the auditors that their authorized capital is this much and paid up capital is this much, were false. They got the license on the basis of false certificates issued by the auditors. It is a very serious issue Sir”. The growth of membership as well as students in the past five years of ICWAI has beenphenomenal with the growth rate of 30% every year. The students are growing at the rate of more than 50% in recent years. This shows that the youth of the country have recognized that a major opportunity lies in acquiring a professional qualification. In all the cases which was mentioned in the Rajya Sabha debate the Chartered Accountancy profession was targeted but ultimately the punishment was handed over to the Cost

Accounting profession which has no role in these scams. Through this exercise, theInstitute of Chartered Accountants of India have enabled foreign management accounting bodies to establish their presence in India. Indirectly this is creating a position of dominance for the Chartered Accounting Institute, which goes against the principles the Government is trying to establish through the Competition policy.

The 50,000 members and 4,00,000 students all over the country are pained due to this unfortunate development. The Central Council Members, Office Bearers of the Regional Councils & Chapters of the Institute have started to send their resignation to the President as a mark of protest against this unfair activity of the Institute of Chartered Accountants of India in preventing the just demand of our profession.Link to the above articlehttp://www.icwai.org/icwainew/docs/ICWAI-PRESS-RELEASE.pdf